March 21 (Bloomberg) -- WestLB AG, the state-owned German
lender bailed out during the global financial crisis, said its
2011 loss narrowed after cutting costs and loan-loss provisions.

The net loss was 48 million euros ($64 million) compared
with 240 million euros a year earlier, Dusseldorf-based WestLB
said in a statement today. Loan-loss provisions fell 61 percent
to 95 million euros, while administrative costs dropped 11
percent to 910 million euros.

To get European Union approval for the bailouts from its
owners, including the German state of North Rhine Westphalia,
and the government, WestLB must sell some assets or transfer
them to a so-called bad bank. WestLB’s business with savings
banks and medium-sized corporate clients will be taken over by
Landesbank Hessen-Thueringen Girozentrale, with the remainder of
the lender becoming a service and portfolio management provider.

“The restructuring of WestLB, which was instigated by the
European Commission and ultimately endorsed by the owners, will
lead to a complete realignment,” Chief Executive Officer
Dietrich Voigtlaender said. “An era is coming to an end.”

The bank’s so-called Verbundbank, which will be taken over
by Landesbank Hessen-Thueringen by the end of June, will have
assets of 40 billion euros and 400 employees. Other WestLB
portfolios that have not been divested by that time will be
transferred to the bad bank, Erste Abwicklungsanstalt.

The new service and portfolio management provider expects
to employ 1,000 people by the end of 2016, WestLB said.
Customers will include the Verbundbank and Erste
Abwicklungsanstalt, it said.